Agents’ fees, image rights, HMRC and tax enquiries

It was recently reported that English Premier League football clubs allegedly avoided £470m of tax.  This will no doubt increase the scrutiny by HMRC on players, clubs and agents.

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Matt Hughes and Dominic Arnold
Published: 12 Apr 2023 Updated: 12 Apr 2023
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The report draws attention to various tax matters relating to agents’ fees. This has been a focus of HMRC for some time, as evidenced by the number of enquiries delving into the tax affairs of numerous professional footballers. There are, however, other issues affecting footballers that are also regularly looked into by HMRC, including image rights and other commercial activities and sponsorships.

Agents’ fees

Agents’ fees are often paid under a ‘dual representation’ agreement whereby the agent acts for both club and player. If the club pays all of the fees, the portion relating to services provided to the player is a taxable benefit and subject to tax and national insurance contributions. The portion relating to services to the club is not. There has arguably been an incentive to maximise the portion that relates to the club, as this lowers the overall tax paid on agents’ fees.

It has been contended that, in reality, the agent is only representing the player and very little or no value should be attributed to services provided to the club; with the consequence that the full amount of an agent’s fee should be taxable on the player.

HMRC has long questioned the tax position taken on agents’ fees.  A ‘default’ split of 50:50 between club and player has been considered as generally accepted practice by some; now, any division of the fee must be commercially justifiable and evidenced.

Clubs and agents were notified previously of the requirement to keep records and evidence in relation to agents’ fees, and we would reinforce the importance of this given the number of enquiries and the building pressure to recover amounts perceived to be lost as a result of such arrangements. We have dealt with HMRC enquiries where the split of agents’ fees was more heavily weighted towards the club, and this has been accepted as the correct position by HMRC based on the available evidence. The opposite will often be true, however, and situations need to be considered on a case by case basis.

For clubs and players, keeping suitable evidence to justify the split of agent’s fees is imperative and ultimately the tax position should follow the commercial reality of a transaction, as would typically be the case in any commercial arrangement.

Image rights and other commercial player income

Football clubs have used image rights agreements with high profile players to exploit the value of their intellectual property rights. It was widely reported[1] in 2021 that there were  £187m of revenues generated from Ronaldo shirt sales when he returned to play for the club and before he had kicked a ball. Given their intangible and subjective nature, image rights continue to be a hot topic for professional footballers and their respective clubs.

Image rights agreements are often separated from employment contracts on the proviso that a footballer’s employment (i.e. playing football) is separable from the exploitation of their image. This has enabled footballers (and other athletes) to potentially receive payments from their clubs (and other commercial partners) in a different manner to their salary.

Previously, footballers would typically set up a UK company to receive their income from image rights, the profits derived from which are taxed at a 25% corporate rate (from 5 April 2023). This compares very favourably to personal income tax rates (at 45% and a 2% national insurance charge), which would apply if the income was paid as self-employed earnings or as salary. This gives a footballer (and their club) the incentive to maximise payments made for image rights, as opposed to usual salary payments. Although it is worth noting that further UK taxes would likely apply when the player extracts funds from his or her company.

HMRC has previously taken a particular interest in challenging cases where there is either little evidence of the image rights being exploited, and/or the portion of a player’s overall club income that is classified as image rights is considered too high to be commercially justifiable.

For non-UK players, the use of a pre-existing non-UK company to receive image rights income can be effective but will likely be subject to close scrutiny from HMRC to ensure such a structure is commercially motivated and not focused on UK tax avoidance. In recent cases we have seen HMRC adopt the view that all such income is taxable in the UK.

We have also seen HMRC enquiries probing the value of a player’s image rights and requesting evidence that the monies received are a true reflection of the player’s commercial value to the club. This is likely to be more challenging for an up and coming player, in contrast to a well-know international star.

We have seen cases where HMRC has sought to tax sponsorship and other commercial income in the same way as image rights.  Endorsement contracts may be more complicated for international players, which cover commercial activities split between the UK and the rest of the world.

If set up correctly, using a UK company to structure image rights and other commercial activities is entirely possible.  If advice is taken and followed, particularly around the records that should be retained to evidence the commercial position, it may reduce the risk of detailed HMRC enquiries. Tax and legal advice should be taken before entering into any image rights or personal sponsorship agreements. It is important that any image rights arrangements are commercially driven and reflect the reality of the underlying transactions.

What are the risks?

  • HMRC opens an enquiry into a player’s UK tax return, which can be stressful and lead to added professional fees (if a player has a tax agent to deal with this on their behalf).
  • If HMRC successfully argues that a bigger share of the agent’s fee was for work done for the player, a higher benefit is reportable on the tax return and more tax is due from the player to HMRC.
  • HMRC may charge penalties and late payment interest on the extra tax due. All in all – a potentially large financial risk to a player, which could also affect an agent’s relationship with them.
  • There is also a risk to the club of having to pay national insurance contributions on the higher benefit figures.

How can Evelyn Partners help?

Our highly experienced team of tax professionals are experts in the field of tax compliance and advisory and will help with meeting reporting obligations. We have extensive experience dealing with football related enquiries from HMRC, with whom we have an efficient working relationship.

At Evelyn Partners, our services entail, but are not limited to, the following:

  • Tax Investigations: dealing with post-submission issues and HMRC enquiries and investigations.
  • Personal tax advice and guidance: guiding you through the complicated rules and legislation of the UK tax system, including advice on how to structure your affairs if commercially appropriate.
  • Personal tax compliance: preparing UK self-assessment tax returns and liaising with HMRC on your behalf, also dealing with matters throughout the year on payments/repayments.
  • Employment tax: reviewing agreements and advising on the employment tax considerations and issues for clubs arising from payments related to agents’ fees and image rights.
  • VAT: advising on the VAT considerations and issues for clubs arising from payments related to agents’ fees, plus any other VAT related matters and associated compliance.
  • Overseas aspects: liaising with contacts in various jurisdictions to assist with any cross-border or overseas matters.
  • Tax Disclosures: advising on the obligation of the disclosure previously unreported matters to HMRC and any tax planning schemes entered into.

If you would like to discuss any of the points above with us, or if you have any queries regarding any of your players or clubs, please get in touch with either Matt Hughes ( or Dominic Arnold (;) who will get back to you or have an appropriate member of our Sports Team contact you.

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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.

Tax legislation

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2023/24.